phx fraud and abuse training module

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Fraud Awareness Training

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CORPORATE STATEMENTCORPORATE STATEMENT

Fraudulent, abusive and wasteful health care billing drains billions of dollars from the nation’s health care system. This price is too steep—higher costs for all society as well as cutbacks in access to essential care.

Premier Healthcare Exchange is committed to protect and preserve the integrity and availability of health care resources to our recipients, our healthcare partners and the general community.

Premier Healthcare Exchange will perform these activities by employing a Special Investigations Unit (SIU) to detect, prevent and eliminate fraud, abuse and waste at the provider, recipient and Health Plan level.

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CORPORATE STATEMENT (Con’t)CORPORATE STATEMENT (Con’t)

Premier Healthcare Exchange will utilize electronic systems and thorough training of our employees to identify possible acts of fraud, waste and abuse.

When such acts are identified, we will seek effective remedies to identify overpaid amounts; prevent future occurrences of fraud, abuse and waste; and report such offenses to the proper authorities.

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Fraud ContactsFraud Contacts

Special Investigations UnitSpecial Investigations Unit

Laura Kanthal-CubidesLaura Kanthal-Cubides

ManagerManager

SSpecial Investigations Unitpecial Investigations Unit

Premier Healthcare ExchangePremier Healthcare Exchange

2 Crossroads Drive2 Crossroads Drive

Bedminster, NJ 07921Bedminster, NJ 07921

908.658.3535 ext: 264908.658.3535 ext: 264

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Fraud ContactsFraud Contacts

Fraud HotlineFraud Hotline1-877-PHX-TIPS 1-877-PHX-TIPS

[email protected]@phx-online.com

CorrespondenceCorrespondence

Premier Healthcare ExchangePremier Healthcare Exchange

2 Crossroads Drive2 Crossroads Drive

Bedminster, NJ 07921Bedminster, NJ 07921

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Fraud AwarenessFraud Awareness

DefinitionsDefinitions

FRAUDFRAUD is an intentional representation that an individual knows to be false or does not believe to be true and makes, knowing that the representation could result in some unauthorized benefit to himself/herself or some other person.

ABUSEABUSE is generally defined as activities that unjustly enrich a person through the receipt of benefit payments but where the intent to deceive is not present or an attempt by an individual to unjustly obtain a benefit payment.

WASTEWASTE is generally defined as activities involving payment or the attempt to obtain payment for items or services where there was no intent to deceive or misrepresent but that the outcome of poor or inefficient methods results in unnecessary costs.

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Healthcare FraudHealthcare Fraud

An intentional deception or misrepresentation that the individual or entity makes knowing that the misrepresentation could result in some unauthorized benefit to the individual, the entity, or some other party.

Examples include:

• UpcodingUpcoding When a provider submits a claim using an incorrect code for the service(s) actually provided. The code used is actually for a similar service provided but is reimbursed at a higher level.

• UnbundlingUnbundling The improper submission of separate claims for services that should be billed together as one combined service.

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Services not renderedServices not rendered When a provider bills for services that were not performed. This fraud can be committed by any type of provider. The elderly are very likely to be victimized in this way.

Medical necessity issues Medical necessity issues An example would be when a provider

exaggerates, misrepresents or falsifies a diagnosis or symptoms to obtain coverage for services which would otherwise be limited or denied. This type of fraud poses a particular problem by exhausting benefits for services which are already restricted, such as physical therapy or psychiatric services.

Disguised ServicesDisguised Services An example would be billing routine prophylactic

dental cleaning as deep scaling, or collagen injections billed as acne surgery.

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Self-referralSelf-referral This occurs when a physician has an interest in a home health agency, supply company or pharmacy. In and of itself, self-referral is not a crime. However, unusually high utilization or referrals from the physician with such an interest may indicate potential fraud and abuse.

Falsified diagnosisFalsified diagnosis This type of fraud is used to obtain payment for services which are specific contract exclusions.

Masked providerMasked provider This type of fraud is used to obtain payment for services which might otherwise be denied. For example, a clinical social worker provides the service, but a psychologist submits the claims as if he/she provided the service. Another scenario might be a chiropractor providing manipulation, but a medical doctor submits a claim for physical therapy.

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False ClaimsFalse Claims This occurs when a physician submits a claim for reimbursement for medical services provided to an insured when in fact the services were not performed.

Claim FraudClaim Fraud This type of fraud occurs when a consumer makes a misrepresentation in order to receive a benefit payment or higher payment that they are not entitled to.

Application Fraud Application Fraud This exists when a party makes material misrepresentations on an application for insurance with the intent to defraud the insurance company.

Eligibility FraudEligibility Fraud This occurs when a party makes misrepresentations so that benefits are received by persons who are not eligible for those benefits.

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Most Common Types of FraudMost Common Types of Fraud

Provider Fraud:

Billing false claims Billing Schemes (Upcoding, Unbundling) Billing that appears to be a deliberate application for

duplicate payment of services Billing of non-covered services as covered items Performing medically unnecessary services in order to

obtain insurance reimbursement Incorrect reporting of diagnoses or procedures to

maximize insurance reimbursement Misrepresentation of dates, descriptions of services, or

subscribers/providers

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Most Common Types of FraudMost Common Types of Fraud

Consumer Fraud:

Claim Fraud—a party submits a claim that contains false, exaggerated or deliberately misleading information designed to result in an undeserved payment.

Application Fraud—a party makes material misrepresentations on an application for insurance with the intent to defraud the insurance company.

Identity Fraud:

Obtaining service or coverage by using a false identity. Allowing someone else to use an insurance card to obtain a

service.

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Red FlagsRed Flags

A A ““Red FlagRed Flag”” is only an indicator of possible fraudulent activity, not proof of is only an indicator of possible fraudulent activity, not proof of any actual wrongdoing. Most claims honestly reflect the services that any actual wrongdoing. Most claims honestly reflect the services that were provided and fraud indicators are often due to honest error. were provided and fraud indicators are often due to honest error. Common sense and the context in which a Red Flag appears on a claim Common sense and the context in which a Red Flag appears on a claim should be considered before referring the claim for investigation.should be considered before referring the claim for investigation.

Patient states service was not provided after receiving EOB Provider states service was not provided after receiving remittance

advice Previously rejected claim is resubmitted with different diagnosis or

procedure code

Services are not documented in medical record

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Red FlagsRed Flags Medical record does not substantiate submitted services

Claim form contains different inks or handwritings Claim form contains erasures, strikeovers or whiteouts Handwritten and printed information is mixed on claim

form Claim forms are completely hand-written Medical terms are misspelled Medical credentials are not known

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Red FlagsRed Flags Unusually long time lapse between date

of procedure and receipt of claim

Provider letterhead is typed, not printed, or are missing telephone number, address or logo

Medical records are all typed, no handwritten observations

Provider’s medical credentials are omitted from claim form—Dr John Smith instead of John Smith, MD—or title and credentials are both used—Dr John Smith, MD

Provider’s signature is missing from claim form or medical record

Frequent telephone inquiries by patient or provider for payment

Provider’s medical credentials do not match type of service provided

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Red FlagsRed Flags

Excessive pressure by patient, provider or attorney to pay a particular claim quickly

Excessive number of treatments for single date of service Information is not in date sequence on claim form or in medical record

A series of claims from same provider contain overlapping dates of

treatment Routine medical services are excessively priced Hospital claim is received but no corresponding claims for

professional treatment are submitted

Surgery claim is received but no record of hospitalization is on record

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Red FlagsRed Flags

Receipts are printed on white bond paper without letterhead Receipts are inconsistent with standard styles Provider advertises for “free” services

Provider and patient share same address Same treatments are provided to multiple family members on

same date of service Routine procedures are performed on Sundays or holidays Claimant or provider refuses to release medical record.

Claims are submitted with photocopied receipts instead of originals

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Red FlagsRed Flags

Organized SchemesOrganized Schemes Provider address consists of a post office box number

followed by a three-letter code such as “SJO” or “PTY”

Routine medical services are performed by providers located in states other than where patient resides

Durable medical equipment claims submitted by providers located in states other than where patient resides

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Red FlagsRed Flags

Remember!Remember!

A “Red Flag” is only an indicator of possible fraudulent activity, not proof of any actual wrongdoing. Most claims honestly reflect the services that were provided and fraud indicators are often due to honest error. Common sense and the context in which a Red Flag appears on a claim should be considered before referring the claim for investigation.

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Health Care Cost TrendsHealth Care Cost Trends

In 2008, total national health expenditures were expected to rise 6.9 In 2008, total national health expenditures were expected to rise 6.9 percent -- two times the rate of inflation. Total spending was $2.4 percent -- two times the rate of inflation. Total spending was $2.4 TRILLION in 2007, or $7900 per person.TRILLION in 2007, or $7900 per person.

Over the time period (2008-2018), average annual health spending Over the time period (2008-2018), average annual health spending growth is anticipated outpace average annual growth in the overall growth is anticipated outpace average annual growth in the overall economy (4.1 percent) by 2.1 percentage points per year. By 2018, economy (4.1 percent) by 2.1 percentage points per year. By 2018, national health spending is expected comprise just over one-fifth (20.3 national health spending is expected comprise just over one-fifth (20.3 percent) of Gross Domestic Product (GDP). percent) of Gross Domestic Product (GDP).

By 2018, total hospital spending is expected to reach nearly $1.4 By 2018, total hospital spending is expected to reach nearly $1.4 trillion, up from a projected $746.4 billion in 2008.trillion, up from a projected $746.4 billion in 2008.

Prescription drug expenditures are another major driver of healthcare costs. They are projected to compose a growing portion of total costs over the next decade.

Sources: Medical Cost Reference Guide, Blue Cross Blue Shield Association, June 2003; Data Bulletin #27, Center for Studying Health System Change, June 2004.

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Health Care Cost TrendsHealth Care Cost Trends

Healthcare fraud drives up healthcare costs.

Estimates of the amount of fraud are substantial.

In 2002, the Office of the Inspector General in the federal Department ofHealth and Human Services estimated that 6.3 percent of the $191.8billion it paid in healthcare claims — or $12.1 billion — should not havebeen reimbursed because of erroneous billing or payment, inadequatedocumentation to support the claim or outright fraud.

Health Care Fraud Cases in the U.S. Resulted in $9.3 Billion in Health Care Fraud Cases in the U.S. Resulted in $9.3 Billion in Damages in the Last Decade Damages in the Last Decade

Source: National Health Care Anti-Fraud Association, 2002

Source: Texas Healthcare Claims Study Source: Texas Healthcare Claims Study Jan. 2001Jan. 2001

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Health Care Cost TrendsHealth Care Cost Trends Fraud and abuse programs within the self-insured and fully

insured population across the nation had been a suspected problem soon after it was implemented. As the program expanded in scope, The National Healthcare Anti-Fraud Association claims that in 2008 alone, approximately $60 billion of $60 billion of healthcare payments had been lost to outright fraud.healthcare payments had been lost to outright fraud.

With improved technology, more powerful and comprehensive fraud and abuse detection systems are available to detect illegal or unethical activities in the healthcare industry.

PHX has contracted with EdiWatch, Inc. to help perform data analysis and certain investigative services on healthcare claims. It is PHX’s goal to prevent payments for fraudulent, abusive or wasteful claims.

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Detection MethodsDetection Methods

Procedures used for detecting possible acts of waste, abuse or fraud Procedures used for detecting possible acts of waste, abuse or fraud by providersby providers

Audits Monitoring Hotline Random Payment Review Edits Routine Validation

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Investigation ProceduresInvestigation Procedures

Procedures for investigating possible acts of waste, abuse and Procedures for investigating possible acts of waste, abuse and fraud by providersfraud by providers

Investigation Guidelines are followed

Preliminary investigation within 15 working days of identification or report of suspicion or allegation.

If preliminary investigation determines suspicious indicators of possible waste, abuse, or fraud, within 15 working days from the conclusion of this, the SIU selects a sample for further review.

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Investigation ProceduresInvestigation ProceduresProcedures for investigating possible acts of waste, abuse and Procedures for investigating possible acts of waste, abuse and

fraud by providers (con’t)fraud by providers (con’t)

Within Within 15 working days15 working days of the selection of the sample, of the selection of the sample, the MCO requests medical records and encounter data for the MCO requests medical records and encounter data for sample recipients.sample recipients.

Within Within 45 working days45 working days of the receipt of the requested of the receipt of the requested medical records, the SIU reviews the data.medical records, the SIU reviews the data.

If the review of additional records is necessary, the SIU If the review of additional records is necessary, the SIU conducts such a review within conducts such a review within 30 calendar days30 calendar days..

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Investigation ProceduresInvestigation ProceduresCase GenerationCase Generation Fraud investigations are generated by Fraud investigations are generated by referral referral or or analysisanalysis.. ReferralReferral A referral is information provided to the SIU from an outside A referral is information provided to the SIU from an outside

source alleging an occurrence of fraud or abuse or stating a source alleging an occurrence of fraud or abuse or stating a suspicion of fraud or abuse. Outside sources can include suspicion of fraud or abuse. Outside sources can include callers to the hotline, company claims processors and other callers to the hotline, company claims processors and other employees, media reports, law enforcement and regulatory employees, media reports, law enforcement and regulatory agency representatives, investigators from other insurers, agency representatives, investigators from other insurers, website visitors and other persons. website visitors and other persons.

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Case Generation (contCase Generation (cont’’d)d)

The SIU supports and encourages the generation of referrals by the maintenance of a toll-free hotline and the printing of the hotline number on Explanation of Benefit forms; training on a regular basis of company employees; networking with investigators from other insurers and law enforcement and regulatory agency representatives, subscribing to publications and other material related to healthcare fraud; maintaining an anti-fraud website, and publicizing anti-fraud efforts.

The unit maintains a standardized Special Investigations Referral Form to assist company employees in referring information regarding fraud and abuse. (Please see training manual provided to your plan).

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Case Generation (contCase Generation (cont’’d)d)

AnalysisAnalysis

Analysis is information developed internally by the Analysis is information developed internally by the SIU that discloses an occurrence of fraud or abuse SIU that discloses an occurrence of fraud or abuse or indicates the potential of fraud or abuse. or indicates the potential of fraud or abuse.

Analysis is based on data review, data mining, or Analysis is based on data review, data mining, or electronic manipulation of data conducted by the electronic manipulation of data conducted by the SIU.SIU.

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The False Claims ActThe False Claims ActThe False Claims Act makes it illegal for anyone to:

Knowingly present, or cause to be presented to the Government a false claim for payment;

Knowingly make, use, or cause to be made or used, a false record or statement to get a false claim paid or approved by the government;

Conspire to defraud the Government by getting a false claim allowed or paid.

In the past, the False Claims Act was usually applied against suppliers of equipment to the military and other government agencies. Today, health care fraud accounts for more than half of all False Claim Act cases.

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What You Can Do To HelpWhat You Can Do To HelpWhat YOU can do to help prevent What YOU can do to help prevent and stop Health Care Fraudand stop Health Care Fraud

Report suspected fraud to the toll free fraud hotline at 1-877-PHX-TIPS1-877-PHX-TIPS.

Follow procedures in the training manual provided to your plan for referrals and reporting.

Inform your subscribers, providers and employees that your company actively pursues fraud and needs their help. Make your customers aware!!!!

Implement system edits once a need has been identified by the SIU to help save money for your company.

Encourage your employees to participate in ongoing Fraud Awareness training. Informational communications should be provided to your subscriber and provider populations.

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On Line Resources and LinksOn Line Resources and Links

PHXPHX’’s SIU establishes and maintains a catalog of on line resources related s SIU establishes and maintains a catalog of on line resources related to fraud detection, investigation and reporting responsibilities.to fraud detection, investigation and reporting responsibilities.

Coalition Against Insurance Fraud:

http://www.insurancefraud.org Federation of State Medical Boards

http://www.fsmb.org

National Association of Insurance Commissioners, state links: http://www.naic.org/state_contacts/sid_websites.htm

NHCAA—National Healthcare Anti-Fraud AssociationNHCAA—National Healthcare Anti-Fraud Associationwww.nhcaa.org/www.nhcaa.org/

END OF DOCUMENT DJAMEND OF DOCUMENT DJAM 3232

THE ENDTHE END

THANK YOU!THANK YOU!

phx fraud and abuse training module

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